Newspaper article The Christian Science Monitor

Alternative Buys for the Stock-Shy ; Wary Investors Eye Bonds, Money Markets, and CDs

Newspaper article The Christian Science Monitor

Alternative Buys for the Stock-Shy ; Wary Investors Eye Bonds, Money Markets, and CDs

Article excerpt

With US stock indexes riding out a tough stretch, and concerns about market volatility growing, many investors are looking to put their money elsewhere.

Take Stephen Smith. A top officer with Brandywine Asset Management in Wilmington, Del., he favors international investing as a long-term alternative to US stocks.

International bonds offer potential down the road, he says, because of the possibility of falling interest rates abroad and foreign currencies' growing parity with the dollar.

Falling rates push up bond prices. Mr. Smith particularly likes the prospects for European bonds in the months ahead.

Global bonds aren't Smith's only alternative to the US stock market. He also buys carefully selected early-American antiques. Well-chosen antiques, he believes, offer the possibility of decent- to-substantial price appreciation. Besides, "you can look at them and admire them" while their value grows, Smith chuckles, something far harder to do with a stock or bond certificate. (Many analysts caution, however, that collectibles are best left to experts.)

Welcome to the world of alternative investing! Amid all the upheaval, the good news is that those spooked by the market have a broad array of options. Among them:

Global stocks: Some longtime market watchers, such as Russ Kinnel, who heads up equity analysis for information firm Morningstar Inc., in Chicago, believe every investor should have at least a small portion of his or her assets in non-US stocks.

Bonds: Numerous opportunities for gains lie here. In particular, US municipal bonds have been considered attractive given their solid yields and tax advantages. Many high-yield (junk-bond) funds have been in positive territory.

James Lowell, editor of the Fidelity Investor newsletter, recently urged his clients to shift some stock assets to the Fidelity Capital & Income Fund, a high-yield fund. Mr. Lowell has also beaten the drum for a broad-based, intermediate-term bond fund, such as the Fidelity Target 2003 fund. …

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